Supply Chain by the Numbers

- Oct. 16, 2014 -

  Supply Chain by the Numbers for Week of Oct. 16, 2014

Google Ups its eFuflilment Game; Walmart Continues to Change Its Store Mix, Invest in eCommerce; Oil Prices Plunge, Could Cause GeoPolitical Issues; New Whole Foods Responsibly Grown Labels



What Google said this week it will charge consumers for unlimited use of its Google Express delivery service in the US six markets the company will operate in, as the company announced plans to add Washington DC, Boston and Chicago to existing service in San Francisco, New York City and Los Angeles. For that annual fee, customer will get unlimited same-day or overnight delivery on orders over $15. When a customer places a Google Express order, employees at one of the local retailer's stores receive notice on an Android smartphone, pick the items from a shelf, and put them into a Google-branded bag. Third-party courier services hired by Google then deliver them. Google Express is adding retailers to its mix, but some are also dropping off, such as American Eagle Outfitters, and Office Depot, have dropped out.




Number of new US Superstores that Walmart will build in the US next year, the company told Wall Street analysts this week, down substantially from its pace over the past few years. Meanwhile, it also said it would build about 220 smaller format stores next year, although that is down a bit from the 240 or so of these smaller footprint stores it will build in 2014, such as Walmart Neighborhood Market. Sales at US Superstores fell by .3 percent in the last quarter and have been on a downward trend for some time. Walmart also said it will spend some $1.5 billion in ecommerce investments next year, up from $400 million in 2013. That includes two new efulfillment centers next year on top of three being constructed this year.


Number of steps that produce and flower suppliers will have to have adhered to gain a "good" designation from grocer Whole Foods, which is launching a new "responsibly grown" labeling system in its 400 stores. The steps are related to how a supplier "protects the air, soil, water and human health," according to the company. The steps vary in difficultly, however, and range from ensuring the supplier meets its rules regarding matters such as irrigation to stopping the use of several pesticides. There will also be "better" and "best" designations too, though Whole Foods has not yet made those requirements public. The rankings will be noted on signs where prices are listed, and mirrors a similar program the grocer has for meat and seafood. The company is trying to differentiate its offerings from "organic" or "healthy" labeled products from large grocery chains.



The global price for a barrel of Brent crude on Thursday, as the price of oil continues to plunge. That’s down some 25% from the recent high of $112 in June, and the lowest level seen since the summer of 2010, in a fall that has been steep and fast. Gasoline and diesel prices have been dropping in kind, perhaps providing a boost to the economy and in the logistics area countering the trend towards rising trucking costs in 2014. The factors: (1) a strong US dollar, given that oil is priced globally in the greenback; (2) concerns and some reality relative to a slowdown in the global economy; and (3) huge gains in US production of oil. While this is mostly all positive, some are warning of the geopolitical impact this decrease in oil prices will have, as countries like Russia, Venezuela, Iran and others see their oil revenues plunge, with oil prices about at production costs, also estimated right around $85 currently and perhaps putting a floor on how low prices can go.